The Seller of a Pork Bellies Futures Contract at $1

question 27

Multiple Choice

The seller of a pork bellies futures contract at $1.41 per pound noted that the closing price of pork bellies was $1.44 today.What will happen to this contract,which requires delivery of 40,000 pounds of pork bellies at expiration?

• A) A loss of $400 is posted to the account.
• B) A gain of $400 is posted to the account.
• C) A loss of $1,200 is posted to the account.
• D) A gain of $1,200 is posted to the account.

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Definitions:

Property Taxes

Taxes paid by property owners, typically annually, based on the assessed value of their property and the tax rate of the local government.

Assessed

Evaluated or estimated the value of (a property, a tax, a fine, etc.) for taxation or pricing purposes.

Shares Outstanding

The total number of shares of a corporation's stock that are currently owned by all its shareholders, including shares held by institutional investors and insider shares.

Repurchased

Items or securities bought back by the seller or issuer from the buyer.